I played a yamaha product which looks similar back in the day and I was underwhelmed. I'm not really a fan of the desktop drumkit idea - mostly because I can't work out where to put the kick pedal.
As a practice kit, probably not something I'd recommend. If you have a kit, then silencer pads work OK, or you can get practice pad setups like a kit quite cheaply.
Sorry about the late reply - dodgy web connections yesterday...
Anyway. How to set up? I'm not too sure about the question, but as I reckon you are pretty new, I'll try to give you some general advice on how to start:
How you set up is pretty much down to your budget. The rough guide I would put in (and Jazzy and others may / may not agree) is that the more cash you spend as a beginner the more interesting sound you'll get out.
The cheapest method of starting is with a pair of sticks and a phone book. Check out some rudiments on the internet (I'm sure there are some great sites out there for this) or get a tutition book - I have the ironically named Drums for Dummies, and it's pretty good. Then you simply work on rudiments. Cost is a tenner or so for the sticks, and a free phone book, but the sound is uninspiring.
You can buy a practice pad, which gives you more feel but still no sound. Cost is about £15 to £20 for a pad, and then a tenner or so for a book.
I advised a practice kit, over an electronic desk thing. This will cost between £50 and £200 plus sticks and a stool and pedal. You get the movement and feel of a kit, but you will get no sound. Neighbour friendly, still reasonably cheap, and you can probably get some practice cymbals (usually made of fibre glass. Probably only available second hand) to get add in the feel of cymbals. This will allow you then to start getting into playing grooves and fills and a kit, rather than rudiments on a pad.
You can get a second hand drumkit sometimes with cymbals, for less than £400. On Ebay, less than £100 in some cases. This is the most unneighbour friendly, but you get real drums to play with. I'd recommend then budgeting for new heads (between £50 and £100) and then you'll work out how to tune them to get the best sound out of them. the nice thing about acoustic kits is you can buy a basic one, and then over time add stuff in as and when you can afford it.
You can buy an electronic kit. I spent a load on mine (about a grand) but you can pick them up much cheaper. You get the joy of drum sounds, using headphones is neighbour friendly and the movement and feel of sitting behind a kit. The response of the pads from hitting them isn't always the same as playing an acoustic kit (generally very different with rubber pads, more expensive kits tend to have 'tunable' heads which are closer), and you can get into some cross trigger issues (where you hit a pad and get the sounds off another pad basically) and I would budget in between £150 and £1000 to get what you want.
An electronic kit is basically a good sounding practice kit. There's lots more to this drumming stuff than in this post, but I hope this will be enough to get you started. Ebay is a great resource for this kind of thing. Gumtree is also pretty good.
There's probably some posts on this forum which will give you advice on buying second hand stuff, but most of the basic advice is pretty obvious - stuff like ensure acoustic drums are round, not cracked, hardware (the cymbal stands basically) is not too beaten up and the threads on the various bolts aren't crossed up or stripped etc.